Start up questions

jonniebgood1

I am about to be let go from my job and I intend with a work colleague to set up a limited company. The purpose being to be able to keep working on projects (maintainance construction work) that our former employer had but at a lower cost base with lower overheads. We think it could be developed into a viable business.

I have read up on many articles regarding CRO set up and then registering for VAT- I do have some queries that I am unsure of:

At what stage do I need to see an accountant. Our intention is that I will keep records of accounts (I have no experience of this) and at the end of the year we present books to accountant to do what ever they do. I was hoping someone here could advise me as to the wisdom or otherwise of this.

Do we need a solicitor on board to form a company?

How long does the CRO process taking. We want as little down time as possible between being let go and starting working as new business. Because of Enterprise advice we will not start CRO process until after being let go from current job.

We both aim to transfer working capital from our private banking. Are there tax implications for this or limits? Talking approx €10k each. From this our limited company would purchase insurance and equipment as well as paying us both wages. We estimate approx 3 months before any money would come into the business account. Any help/ advice is appreciated.

dbran

Hi

It is possible to set up a limited company yourself. However a professional company formation agent can usually set one up for about €300 plus VAT.

A company can be formed withing 3-5 days. If you set it up yourself it can take longer perhaps up to 15 working days (provided you have not made any errors in the documentation)

You should consider meeting up with an accountant for an initial consultation. It should normally be free and you will be able to sort out a number of questions whilst seeing if you are able to work with them later on.

How the company is set up initially will have an effect on the tax treatment of the money put into the company.

Hope this helps

Kind Regards

dbran

Mr. G

jonniebgood1 wrote: »

We both aim to transfer working capital from our private banking. Are there tax implications for this or limits? Talking approx €10k each. From this our limited company would purchase insurance and equipment as well as paying us both wages. We estimate approx 3 months before any money would come into the business account. Any help/ advice is appreciated.

Just one tip of advice. Setup a bank account for the business. Keep your personal account seperate from the business.

jonniebgood1

Thanks for help so far folks.

I am sure I will have some more questions shortly!

TheCostumeShop.ie: Ronan

jonniebgood1 wrote: »

The purpose being to be able to keep working on projects (maintainance construction work) that our former employer had but at a lower cost base with lower overheads. We think it could be developed into a viable business.

Have you checked with your previous employment contract that there is no non-compete clauses? Definitely something to consider.

Hanley

Are non-compete clauses legally enforceable? Serious question.

I know non-solicitation clauses are pretty much iron clad, but think I remember hearing something about how non-compete clauses are deemed to be unreasonable as you effectively prohibit someone from earning a living.

TheCostumeShop.ie: Ronan

Yes they can be enforceable, it depends on the circumstances ofcourse and they must be reasonable, but taking clients directly from under a former employer and carrying out the work they were already doing at cheaper cost would be considered reasonable.

Peterdalkey

Open-ended non-compete clauses have certainly been held to be invalid/unenforceable in the past. Any such clause should be of a reasonable duration and usually require "garden leave" payment.

However using confidential/propriertory information gained in the course of an employment that is used to "steal away" the business is open to much more serious repercussions.


Cheers

Peter

Hanley

Very sorry for the hi-jack, but thanks for that guys. Very interesting and informative!

jonniebgood1

TheCostumeShop.ie: Ronan wrote: »

Have you checked with your previous employment contract that there is no non-compete clauses? Definitely something to consider.

Its a good point but our previous employer is happy enough that we are thinking of this. He is voluntarily liquidating with no outstanding or unpaid debts, basically retiring. We aim to keep ourselves employed although the figures are not great looking at the moment. We hope to qualify for short term enterprise allowance and this would allow us some chance of developing in the first year.

TheCostumeShop.ie: Ronan

jonniebgood1 wrote: »

We aim to keep ourselves employed although the figures are not great looking at the moment.

Fair play. Might be worth getting a session with a mentor to get some advice on starting up a business. Maybe look into taking on a fas intern as well with a view to training up your first employee.